Research On The Floating Charge

During1870s, the floating mortgage system which known as an ingeniousinitiative work was bred and established by the rule of equity in England, and later itwas used as reference by many countries after the development of the followinghundreds of years. Compared with the traditional guarantee system of “One ThingOne Right”, the new system was certainly a kind of breakthrough, which took thefuture objects or income as collateral and before the ending of the floating mortgage,the collateral could be freely managed or operated by the mortgager, breaking thetraditional time and spatial limits on collaterals to a large degree.The floating mortgage system refers that the borrowing enterprises took all theproperty as collaterals, including the current means of productions and part of or theentire possible achievable assets in the future. The borrowing enterprises couldmanage the assets that were taken as collaterals under normal managementconditions freely or in accordance with the bilateral agreed limited circumstances.When the legal or agreed situations happened, the actual value of collateral propertycould be determined, a system of which the mortgagee could have the priority to getcompensation upon the determined collateral property.The Property Law in China introduced the floating mortgage system ofCommon Law system in2007, which provided a new financing method foragricultural operator, individual business and enterprises. However, the floatingmortgage system of the Property Law in China was oversimplified from the angle ofboth legislation and practice, which has large space for improvement and perfection.This paper starts from the basic theory of floating mortgage right and gets anunderstanding of relative legislation of floating mortgage system in various countriesof Common Law system and Civil Law system systematically and comprehensively,borrowing their typical model successful experience. On that basis, the domesticlegislation loopholes and practical dilemmas are analyzed and certain assumptionsare proposed for the improvement of floating mortgage right, under the purpose ofproviding beneficial references for the practical implementation of floatingmortgage.This paper is divided into five parts: the first part is introduction, whichintroduces the research background and significance of floating mortgage system, theresearch literature review of relative problems of floating mortgage both domesticand abroad and the paper research purpose and innovation; the second part is mainly the basic theory of floating mortgage system overview, which primarily explains theprinciple concept and features of floating mortgage system and analyzes the value offloating mortgage in depth. Through the comparison between floating mortgagesystem and other traditional mortgage rights, how the floating mortgage systembreak the traditional mortgage methods is presented; through the comparison offloating mortgage systems’ legislation investigation among various countries, thethird part presents the floating mortgage operational procedures in various countriesof both Common and Civil Law systems systematically and comprehensively,borrowing the typical model and successful experience and concluding therevelations for national floating mortgage system improvement; the fourth partmainly analyzes the problems of national floating mortgage system: the subject scopesetting of floating mortgage is over-widened; the object scope of floating mortgage isrelatively narrow; the limitation lack upon mortgagees; the deletion of floatingmortgage priority; imperfection of floating mortgage registry system; the existingflaws in floating mortgage realization mechanism; the fifth part provides pointedimprovement suggestions: the supporting measures establishment corresponding tothe subject scope of floating mortgage; the floating mortgage object scope expansionand supervision intensification; reasonable limitation on the free right of dispositionof mortgager; clearness of the priority and sequence relation among floatingmortgage and other rights; floating mortgage registry system improvement; floatingmortgage realization mechanism establishment and perfection.